Recently, many social media posts claimed that GST would be applied to UPI payments over ₹2,000. This made a lot of people anxious, especially those who use digital payments daily. But the Indian government has clearly stated that there is no GST on UPI transactions, no matter the amount.
GST On UPI Payments above 2000Rs - Government Clarifies On Social Media.
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| GST On UPI Payments |
Let’s break it down in simple terms.
What Is GST?
GST (Goods and Services Tax) is a tax collected by the government when people buy goods or use services. It’s a single tax system that replaced multiple old taxes like VAT, excise, and service tax.
GST was introduced to simplify taxes, but today, many Indians feel overburdened by the number of taxes they pay — on food, fuel, mobile recharges, insurance, and even basic services. People often share their frustration online, feeling that too much of their income goes into paying taxes, and are worried whenever there’s talk about new charges.
What Is UPI? And How Do People Use It Every Day?
UPI (Unified Payments Interface) is a digital payment system that allows you to send or receive money directly from your bank using your smartphone. You don’t need to enter long bank details — just a mobile number or UPI ID is enough.
What Are Common Ways People Use UPI ?
- Paying for groceries at local shops
- Sending money to friends and family
- Ordering food online
- Buying movie tickets
- Paying electricity or phone bills
- Recharging mobile or DTH
Popular UPI Apps in India:
-PhonePe
-Google Pay
-Paytm
-BHIM
-Amazon Pay
Whether it's a ₹10 tea or a ₹10,000 purchase, millions of Indians use UPI every single day. It’s fast, free, and safe — and that’s why people were worried about any new tax.
What Did the Government Say About GST On UPI Transactions?
The Ministry of Finance made it very clear: “There is no proposal to levy GST on UPI transactions.”
In fact, the "Press Information Bureau (PIB)" and government spokespersons have debunked these false claims on social media.
**No extra tax. No GST. No fees.**
The claims that the Government is considering levying GST on UPI transactions over ₹2,000 are completely false, misleading, and without any basis.
— CBIC (@cbic_india) April 18, 2025
👉Currently, there is no such proposal before the government.
👉GST is levied on charges, such as the Merchant Discount Rate…
Why Is There No GST On UPI Transactions?
GST is typically levied on charges like the Merchant Discount Rate (MDR), which are applicable during transactions. However, since January 2020, the government has removed MDR on Person-to-Merchant (P2M) UPI transactions through a Gazette Notification dated December 30, 2019. As a result, no MDR is charged on UPI transactions, and consequently, no GST is applicable.
Why The Confusion About GST On UPI Payments Above 2000rs?
The confusion began after some viral posts on WhatsApp and X (Twitter) said there would be an 18% GST on UPI payments above ₹2,000. This isn’t true.
Since 2020, the government has even removed Merchant Discount Rate (MDR) charges on UPI and RuPay card payments, to promote digital payments. So, if there’s no charge, there’s no GST on those charges either.
Government’s Push For Digital India
The government also launched an incentive scheme for banks and small merchants who accept UPI payments, especially for small-value transactions. This encourages more people to go digital and helps India move toward a cashless economy.
Conclusion
There is no GST on UPI payments — not even for amounts over ₹2,000. You can continue using your favorite UPI apps without worrying about extra taxes.
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